Religion and business have been closely intertwined throughout American history. The original corporate charter for the Virginia Company in 1606 addressed matters both commercial (such as the granting of mining rights) and religious (such as the propagation of the Christian faith). Puritan merchants in New England started each new ledger with the inscription “In the name of God and profit.” So long as God came first in their lives and businesses, they saw nothing wrong with pursuing financial success. Some Puritans even believed material wealth was a sign of one’s future salvation.
Over the centuries, the nation’s religious diversity has increased, so that the United States is now home to many different religious traditions, and many different religious views on money-making. Some groups profess that God wants them to be fabulously wealthy, while others seek God by adopting a life of poverty. In a religiously pluralistic society, such a diversity of views on religion and money-making is hardly surprising.
What is surprising is that, increasingly, governments and private parties are arguing that there is only one appropriate view of the relationship between religion and money-making: Exercising religion is fundamentally incompatible with earning profits.
This claim has been presented recently by state governments and private parties in litigation over pharmacy rights of conscience, and by state governments enacting conscience clauses with regard to recognizing same-sex marriages (non-profits are sometimes protected, but never profit-makers). The most prominent and developed form of the argument has been made by the federal government in the HHS mandate litigation, where it is currently arguing the point in at least seventeen different cases against businesses and business owners who cannot comply with the mandate on religious grounds.
Do our religious liberty laws protect profit-making businesses and their owners? Or is the government correct that, to borrow a phrase from the Gospels, you “cannot serve both God and mammon”?
When considered in the light of religious teachings, actual business practices, and the law’s treatment of for-profit businesses in other contexts, it is clear that there is no inherent disconnect between earning profits and exercising religion. For this reason, there is no principled basis for excluding profit-making businesses and their owners from the protection of our religious liberty laws.
The Government’s Case Against Religious Liberty for Profit-Makers
The government, as argued in the DOJ’s motion to dismiss the Hercules case, has a two-part argument against religious liberty for profit-makers. First, it claims profit-making businesses themselves cannot engage in religious exercises because their “overriding purpose is to make money.” Making money is a goal the government labels “secular,” so that “by definition” profit-making businesses “do not engage in any exercise of religion.” Profit-making always completely crowds out religion.
Second, the government says the individual business owners are unprotected because they have “voluntarily chosen to enter into commerce” by operating a profit-making business as a distinct legal entity. Because some business forms provide advantages such as limited liability, owners should not be able to assert religious liberty claims in their individual capacities. Any claim that an owner experiences pressure to give up a religious practice when the government punishes the business is dismissed as a “type of trickle-down theory” of religious liberty for profit-makers that courts should reject out of hand.
The entire argument turns on the issue of profits. As a legal matter, there is no dispute that non-profit organizations and the people who run them have religious liberty rights. The Supreme Court has repeatedly recognized this principle for non-profit corporations under both the Free Exercise Clause and the Religious Freedom Restoration Act (RFRA). When the administration issued its recent Notice of Proposed Rulemaking, it made clear that non-profit religious objectors could obtain protection regardless of their corporate form, while all for-profit organizations were excluded entirely. It is the generation of profits, and not the corporate form, that strips an organization and its owners of religious liberty, in the administration's view.
Can Profit-Making Businesses Really “Exercise Religion”?
Under federal law, a religious “exercise” is simply acting or abstaining from acting based on a religious belief. Both the Free Exercise Clause and RFRA protect a wide variety of actions and abstentions as religious exercises, from refusing to send one’s children to public schools, to selling religious literature on public streets, to refraining from working on tank turrets. The key to determining whether these behaviors qualify as “religious exercises” is whether they are performed for religious reasons.
Do religions impose similar requirements on profit-making activities? Many do. For example, Judaism imposes a range of religious rules on the conduct of business, requiring honesty in all business dealings, closing for the Sabbath, and (according to at least some authorities) refraining from providing others materials that are harmful to human health, such as tobacco. The Talmud, a sacred Jewish text, actually suggests that the first question asked in the afterlife is “have you been honorable in business?”
Islam likewise imposes detailed rules on the conduct of profit-making businesses, requiring absolute honesty with customers, and addressing matters such as the prices that can be charged, what loans can be taken, and which goods can be sold (no selling forbidden items such as pork, pornography, or liquor, because “When Allah prohibits a thing, he prohibits giving and receiving the price of it as well”).
The Catholic Church too teaches that businesses should look beyond profit-maximization and seek justice for employees, customers, the community, and the environment. Businesses must avoid actions that undermine the common good, such as providing others with harmful products, because “we are all really responsible for all.”
Interestingly, religions often emphasize that the corporate form does not insulate a business owner from moral responsibility for the actions of his or her business. Jewish teachings, for example, emphasize that the profit-making business corporation is not separate from the individual shareholder or owner. This “separation of identity” on religious matters is rejected because it “creates moral problems since the same person who in his private life would not think of stealing or robbing or breaking the law sees nothing wrong with doing exactly those things in his role as a director or an official of a corporation.”
Not surprisingly, at least some people take religious teachings like these to heart and operate their businesses according to religious principles. Thus some gas stations close on the Sabbath (and serve only kosher food in the station’s coffee shop), Muslim for-profit business owners seek out specially structured business loans to comply with Islamic law to expand a small grocery store, and other businesses run newspaper ads urging people to “know Jesus as Lord and Savior.”
These actions seem quite obviously based on religious beliefs, and therefore they constitute religious exercises under the law. Still, some argue that the religious beliefs in question belong to the business owners, and not to the businesses themselves. After all, can a profit-making business really be said to hold a belief about matters so abstract as morality, ethics, philosophy, or religion?
A broad look at our legal system’s treatment of for-profit businesses suggests that they can, and that earning a profit does not generally change an organization’s legal or constitutional rights.
Profit-Making Businesses and the Law
Religious liberty law strongly indicates that profit-making businesses can exercise religion. Twice the Supreme Court has recognized that business owners can assert free exercise claims against government burdens imposed on their religion.
The Court frequently applies religious liberty law to protect people who are trying to make money; indeed, the whole purpose behind Title VII’s ban on religious discrimination in private employment is to protect the right of people to make money without facing burdens on their religion. The Court has repeatedly said that the corporate form itself is not a bar to religious exercise, as it unanimously found in last year’s Hosanna-Tabor case. And conscience clauses across the country (and even within the Affordable Care Act) recognize that profit-making businesses may have religious or moral objections to participating in abortion. These factors alone make a strong case that profit-makers can exercise religion.
But even if religious liberty law had never addressed the question of religion and money-making at all, our legal treatment of for-profit businesses in a host of other contexts confirms that they can exercise religion and are protected by our laws. Three principal points emerge.
First, our laws regularly treat for-profit businesses as capable of forming and acting upon subjective beliefs, including beliefs about religion. We regularly encounter profit-making businesses taking ethical stands, for example, concerning the proper treatment of animals or the environment. We hold businesses liable under criminal laws requiring prosecutors to prove that the corporation formed mens rea or a “guilty mind.”
In the employment discrimination context, we have no problem finding that businesses can hold and act upon subjective beliefs about race, sex, sexual orientation, and even religion—and if businesses are found so to act, state and federal laws often hold them liable for discrimination. There is no principled basis for saying that for-profit businesses can form and act upon subjective beliefs about all of these other matters (and about religion, when discriminating), but cannot form and act upon beliefs about religion in other ways.
Second, our laws do not treat the distinction between for-profit and non-profit entities as particularly significant in most contexts. Both for-profits and non-profits are permitted to act based on ethical, philosophical, and moral commitments. Likewise, both for-profits and non-profits are capable of forming mens rea and being held liable for crimes. Title VII expressly says that “businesses” can use religion in hiring in certain contexts. The federal tax code acknowledges that religious non-profits can sometimes engage in profit-making activity as long as they pay taxes on that activity. The distinction does not control constitutional analysis under the commerce clause, the free speech clause, or the commercial speech doctrine. And it is clear from the Court’s own decisions that for-profits can also successfully assert claims under the establishment clause. It is difficult to see why profit-making—which seems to have so little impact in so many areas of the law—should possess overriding importance in just one particular area: religious liberty.
Third, our laws are frequently based on the simple reasoning that one way to pressure a business owner is to impose penalties on the business. This understanding supports the imposition of corporate criminal liability and corporate liability for impermissible discrimination under Title VII. As Richard Posner has explained, “if shareholders bear no responsibility for a manager’s crime, they will have every incentive to hire managers willing to commit crimes on the corporation’s behalf.”
It is difficult, then, to see why the law should assume that religious business owners do not feel substantial pressure when the government imposes penalties on their businesses as punishments for religious exercises. The far more logical approach is to recognize that when a penalty is imposed on a business, the owner of the business likely experiences that penalty as a pressure to act in a particular way.
Religious Liberty for Profit-Making Businesses and Their Owners
Denying religious liberty rights to profit-making businesses and their owners requires treating religious exercise as a special and disfavored activity in ways forbidden by the Constitution.
To support the government’s claim that profit-making is incompatible with religious exercise, businesses would have to be deemed able to act on motivations about ethics, the environment, and other subjective beliefs, but unable to act on beliefs about religion (except when they are engaged in religious discrimination, at which point the law will recognize the business as capable of acting on beliefs about religion after all).
Further, it would have to be assumed that business owners would be generally responsive to penalties imposed on their businesses, except when those penalties come as direct punishment for religious exercise, at which point the owner is deemed immune from feeling such pressure.
The Constitution would need to be read to ignore the profit distinction for every other type of analysis but to strictly embrace that same distinction as absolutely controlling in the free exercise clause, though not the rest of the First Amendment. Title VII would need to be read not as broadly protective of the right to exercise religion while making money, but as the source of a broad incapacity of all profit-makers to exercise religion in any context whatsoever.
There is no principled or permissible reason to treat religious exercise in this specially disfavored manner. The far better approach—indeed the only approach permissible under our Constitution and religious freedom laws—is for the law to recognize that different people will engage in different religious exercises in a nearly limitless variety of contexts, including the profit-making context.
As a matter of religious belief, of course, individuals and religious groups may still choose to adopt a strict interpretation of the theological statement that one “cannot serve both God and mammon.” But as a matter of religious freedom, the government may not.
Mark L. Rienzi is an Associate Professor of Law at the Catholic University of America, Columbus School of Law. He is also Senior Counsel at the Becket Fund for Religious Liberty, where he has represented several religious business owners and their businesses asserting religious freedom claims, including Hobby Lobby Stores, Inc. This article is taken from a longer piece titled “God and the Profits: Is There Religious Liberty for Money-Makers?”
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